In re Hous. Specialty Ins. Co.
569 S.W.3d 138
Tex.2019Background
- HSIC insured South Central Coal Co. under a commercial general liability policy; Carters sued the Coal Co. in Oklahoma for allegedly mining their land.
- HSIC, following advice from law firm Thompson Coe, denied the Coal Co. a defense and coverage; Coal Co. obtained partial summary judgment that HSIC had a duty to defend and later settled with the Carters and with HSIC.
- HSIC then accused Thompson Coe of legal malpractice for advising the declination and sued Thompson Coe in Oklahoma; Thompson Coe preemptively filed a declaratory-judgment action in Harris County seeking ten declarations, many of which would establish nonliability for malpractice.
- HSIC moved to dismiss Thompson Coe’s UDJA suit under Texas Rule 91a, arguing parties may not use the UDJA to obtain declarations of nonliability in tort (Abor rule); the trial court denied the motion and HSIC sought mandamus relief.
- While proceedings continued, HSIC also filed a malpractice suit in Oklahoma; the Oklahoma court abated that case, and Texas Supreme Court considered whether the Harris County court abused its discretion in denying dismissal.
Issues
| Issue | Plaintiff's Argument (Thompson Coe) | Defendant's Argument (HSIC) | Held |
|---|---|---|---|
| Whether a potential tort defendant may obtain a UDJA declaration of nonliability | UDJA authorizes declarations; trial courts have discretion and may retain UDJA suits, especially when other non-liability declarations are requested | Abor forbids a potential tort defendant from using UDJA to obtain declaration of nonliability; such claims have no basis in law | Court held Abor bars declaratory suits seeking nonliability in tort; Thompson Coe’s requests have no basis in law |
| Whether accompanying non-liability requests can save an otherwise invalid UDJA claim | Ancillary declarations (e.g., discoverability) can justify exercising jurisdiction and defeat dismissal | A legally invalid non-liability claim cannot be saved by accompanying claims | Court rejected Hernandez’s contrary view; invalid non-liability claims are not saved by related requests |
| Whether denial of a Rule 91a dismissal is reviewable by mandamus | Thompson Coe implied discretion and final-judgment appeal adequate | HSIC argued mandamus appropriate because error forces proceedings in wrong court and causes wasted resources | Court held mandamus appropriate; appeal would be inadequate remedy |
| Whether Hernandez v. Abraham (14th Dist.) correctly interpreted Abor | Hernandez: trial courts have jurisdiction and limited discretion to refuse to hear declaratory non-liability suits | HSIC: Hernandez misread Abor and is disapproved to the extent it conflicts with Abor | Court disapproved Hernandez’s reading and reaffirmed Abor rule |
Key Cases Cited
- Abor v. Black, 695 S.W.2d 564 (Tex. 1985) (prohibits potential tort defendants from using UDJA to obtain declarations of nonliability because it deprives injured party of forum-choice)
- BHP Petroleum Co. v. Millard, 800 S.W.2d 838 (Tex. 1990) (reiterates and explains Abor’s proscription on declaratory non-liability suits by potential tort defendants)
- MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) (distinguishes contract disputes from Abor rule applicability)
- In re Essex Ins. Co., 450 S.W.3d 524 (Tex. 2014) (mandamus appropriate where declaratory claim has no basis in law; appeals inadequate)
- In re John G. & Marie Stella Kenedy Mem'l Found., 315 S.W.3d 519 (Tex. 2010) (mandamus spares parties and public the expense of improperly conducted proceedings)
- In re J.B. Hunt Transp., Inc., 492 S.W.3d 287 (Tex. 2016) (clarifies adequate-remedy-by-appeal standard for mandamus review)
- Archer v. Anderson, 556 S.W.3d 228 (Tex. 2018) (illustrative of Texas courts’ rejection of certain common-law causes of action)